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Viewpoint: Consolidation is all about timing
Norbert Meyer, VP of Strategic Projects, X-Fab
EETimes Europe (02/18/2009 12:42 PM EST)
It's time to shift the thought paradigm from "What fabs do I have today, and how do I fill them?" to "What fab base do I need five years from now and how do I get there?"
An ad campaign a few years ago posed a clear strategy choice: Whether to be wolf or sheep? Most semiconductor companies face a similar decision today: be active in market consolidation or risk being swallowed. Portfolios of half-empty fabs burning cash reduce strategic options and can threaten an IDM’s existence.
Many consolidation strategies are bound to fail. One example is entering the foundry business when the number of underutilized fabs is growing and overall demand is absent. Succeeding in the foundry business requires far more than simply offering fab capacity. Transferring products to other fabs takes too long to achieve a significant impact, if begun under pressure.
EETimes Europe (02/18/2009 12:42 PM EST)
It's time to shift the thought paradigm from "What fabs do I have today, and how do I fill them?" to "What fab base do I need five years from now and how do I get there?"
An ad campaign a few years ago posed a clear strategy choice: Whether to be wolf or sheep? Most semiconductor companies face a similar decision today: be active in market consolidation or risk being swallowed. Portfolios of half-empty fabs burning cash reduce strategic options and can threaten an IDM’s existence.
Many consolidation strategies are bound to fail. One example is entering the foundry business when the number of underutilized fabs is growing and overall demand is absent. Succeeding in the foundry business requires far more than simply offering fab capacity. Transferring products to other fabs takes too long to achieve a significant impact, if begun under pressure.
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